Recapitalisation Fund For Scam-Hit State-Owned Banks
BASIC to get Tk 790cr, Sonali Tk 710cr this week
The finance ministry is set to inject Tk 1,500 crore into the two state-owned commercial banks—Sonali and BASIC—soon to shore them up from capital crunch and keep them afloat. The recapitalisation fund would be released this week, a senior official at the ministry said. Of the total recapitalisation fund, BASIC will get Tk 790 crore and the rest Tk 710 crore will be for Sonali.Both the state-owned banks’ combined capital shortfall was Tk 3,987.94 crore as of last September, due mainly to their inefficient and corrupt mode of loan sanction and disbursement that resulted in huge stockpile of defaulted loans.
‘We are going to release the recapitalisation fund of Tk 1,500 crore by December 31 as the government wants to see the ailing banks
make their turnaround soon,’ an official at the bank and financial institution division of the finance ministry said.
He, however, said the banks concerned have to implement a set of conditions attached to the
utilisation of the proposed recapitalization fund.
As of September 2014, Sonali’s capital shortfall was Tk 1,730.30 crore, up from Tk 1,511.31 crore from June, this year. The shortfall of BASIC increased by nearly Tk 600 crore during the given period, suggesting a persistent deterioration in the financial portfolio of the bank, once considered as one of the best-performing public sector banks in the country.
The state-owned commercial banks including Sonali received Tk 4,100 core as recapitalisation fund last December after they faced severe shortage of liquidity due to loan scams. Sonali failed to realise a
single penny during the last couple of years out of the swindled Tk 3,500 crore by little-known Hallmark Group in 2012.
Sonali was recapitalised by Tk 1,995 crore, Rupali Tk 210 crore, and Agrani and Janata Tk 1,081 crore and Tk 814 crore respectively last time.
The finance ministry officials concerned said the proposed fund
could not be utilised by the banks on the head of their revenue expenditure, but for capital expenditure like automation purpose only.
The banks have to obtain prior permissions from Bangladesh Bank before they spend the recapitalisation fund, they added.
Another finance ministry official said both the banks have to revise their separate credit and credit risk management policies, prepare their individual policies for implementation (process manual) of the core risk management guidelines with detailed roadmap, form core risk management committees comprising directors of the respective banks and devising their own internal control and compliance policies.
‘Our effort to recapitalise the public sector banks is expected to improve their scandalous image,’ the finance ministry official said.
The current budget has an allocation of Tk 5,000 crore in the head of ‘bank re-capitalisation’.
-With New Age input
